India To Play Key Role In Growth Of Financial Services Industry

May 12, 2011

Research firm, Everest Group has done a study which found that the financial services industry has the capacity to hit a $250 billion. India is expected to play a major role in this.

The financial services business process outsourcing (FSBPO) makes up about $18 billion, making up approximately 40% of the $40 billion sourcing market world wide.

The report entitled, Role of global sourcing in financial services BPO, found that the most robust growth was seen in Eastern Europe, South America and Central America. Meanwhile, some of the mature destinations for FSBPO were India, China and the Philippines.

Vikash Jain, Everest Group Partner, was quoted as saying in The Hindu, “India continues to play a key role in the FS BPO space and offer attractive arbitrage opportunities compared to onshore locations in US, UK, and Europe.”

Apart from labor advantages, India continues to appeal to this segment because of expertly skilled people in financial services. enhanced service levels, process excellence, and risk diversification by buyers.

Research director and co-author of the Everest report, Rajesh Ranjan said, “Despite challenges, such as constraints in the United States associated with the Troubled Asset Relief Programme (TARP) and data protection measures in the European Union, the impact on global sourcing has been minimal.”

The report also said that the BPOs involving banking comprise of almost half of the total scale of sourcing operations worldwide in the FSBPO sector. At the same time, capital markets make up the most rapidly growing segment. It shows a year on year growth of 40 percent from 2009-2010.

The report looked at the outsourcing landscape around the world, in the banking, insurance segments and capital markets. It also looked into labor efficiencies, along with various offshore and nearshore delivery destinations. Demand in insurance business process outsourcing can be seen along with a higher requirement for analytics to assist in client retention/acquisition.


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